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Lessons - Breaking Away From Institutional Financial Systems | Miko Matsumura - $500M Crypto VC Fund Partner · Success Story with Scott Clary

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  In this lessons episode, explore how blockchain challenges traditional institutions by creating
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  financial choice and accountability. Discover how decentralized systems compete for consent and
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  keep structures honest, understand why responsible risk-taking and diversification matter in crypto,
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  and uncover how curiosity and caution enable smarter participation in the digital economy.
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  But even blockchain is an attempt at freedom from ingrained and trenched institutional systems,
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  right? That's what it is. And the thing that's fascinating is that the existing systems
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  aren't able to offer the freedom. They're not able to. And the reason why I assert they're not
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  able to is even if you like it there, you still don't have a choice. You don't have an alternative
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  financial system where you can basically choose to go. But now you do, right? So what has emerged
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  out of blockchain technologies is this alternative financial system. And the thing that it does is it
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  does two things, right? The first thing it does is it competes for consent. So you know what that
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  means is is that it's trying to serve you the best, right? And if you don't like it, you don't,
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  you shouldn't, you shouldn't come over, right? So it in essence, but the other thing that it's
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  doing other than providing an alternative is it does what all alternatives do, which is it keeps
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  the competition honest, right? So it actually now says, I'm going to compete for your consent.
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  So the existing system must also compete for your consent, right? And if you like me better,
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  then you'll come over here. And if you don't like it, then you'll stay, right? Which is like
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  what a nice thing, right? So it helps everyone. And what I mean by it helps everyone is is,
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  you know, let's say there's a safe place where you can escape. Like let's say it's a safe home,
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  right? And let's say it's in a neighborhood that's a lot like where you live, right? So like
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  the existence of that is great for people that need a safe place to go, right? They need to go
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  somewhere. So they're going to go and that gives them freedom, right? If you like where you are,
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  then you should stay, right? But I want what I'm suggesting to you is it gives you freedom too.
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  Even if you don't go over there, the existence of that gives you the ability to withdraw consent.
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  So if suddenly you find yourself in a situation where you're like, okay, the system was working
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  beautifully for me. And now it's not. So now I have a place to go, right? And even if you don't ever
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  go there, it's still going to keep the system you're in, honest, right? Because, you know, because of
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  that competition. So, you know, that's that's really kind of the mindset that, you know, I'm excited
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  about because, you know, when we talk about this kind of blockchain tech, like Satoshi Nakamoto
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  created this entire paradigm around fork it and go, right? That's what he created. And so in a sense,
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  like, you know, that means we're, you know, I'm not like a Bitcoin maximalist because like the whole
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  point of it is, is anyone can fork it at any time. And if they don't like anything, they can just
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  change it, right? And so a lot of people are like, oh, I don't like this feature. I don't like that
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  feature. Like, great, fork it and go. Like, you know, if it's better, everyone will go with your
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  version. Everyone will leave if it's better. So the issue, the issue with the evolution of this
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  environment is that you have these highly technical individuals that adopt and subscribe to that
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  mindset. But for the rest of the world that is just trying to keep up and understand,
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  because of the ability to fork it and go and to just create new and to create business and to
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  create, you know, alternative blockchains and to create different applications and whatnot,
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  it's very hard to keep up and to figure out what's good and what's not, which is really, right?
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  That's the, that's the issue. You're in it. You see what's good. You see, you can, you can,
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  besides being a venture capitalist, you understand the Azure technology, but then you also work with
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  these, you know, these founders and developers day in day out. So the people behind certain other
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  projects, obviously not Bitcoin, but other projects like some of the ones that you've invested in,
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  some of the ones that I'm sure that, you know, you work with every single day, you have an idea of
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  what works and what doesn't and why it would work or why it doesn't make any sense. But you're,
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  you're deep. Like, you're in the weeds. So that's the issue that everybody's running into, right?
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  I think that is very, very legitimate, right? Which is that it is like this revenge of the
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  nerds type of a universe. And the thing that I think is so important is this, right? Which is,
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  I think to me, if I were to give any single advice to people who are new in this area is I would say,
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  like, don't be in a big hurry, right? Like, like, just go in, don't invest like a huge amount.
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  Like, just, just see what happens, right? Because the point is is like, there's some games where you
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  can set not call them games, right? I'm talking about a system of rules that you can send to operate
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  under, right? So this could include a country where there are laws or it can include a monetary
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  system like a Bitcoin or it can include open source software. It can include a literal kind of
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  a video game, right? Like, all of these systems have rules that you can set to agree to. So the
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  thing is is that oftentimes the rule sets are complex, right? It could even, it could even be like
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  a cult that you want to join, right? It's like, oh, I don't want to join this cult, right? So,
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  so there's all these weird rules and you're kind of like, okay, I don't, I consent to these rules
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  until I don't, right? And so, so there's this process that I call that that's called mechanism
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  discovery, right? So mechanism discovery is, is you play, right? You play around and you're like,
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  you know, it's just like going to a new country or a new place, you just, you're at first,
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  you're a little bit like, I don't know what the deal is here, you know? And, and you know,
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  you can immediately be like, I don't like the way people are acting, you know? But maybe if you
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  have curiosity and maybe if you're like, these seem like okay people, like, you know, then maybe
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  you kind of are like, well, why do they keep doing that or why do they keep saying that? After a
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  while you might discover that there's some pretty cool stuff behind that, right? You might discover
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  like, oh, wow, like, I get why they're acting like that. That's so different, right? And then
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  you kind of grow as a human, right? So or, or, or, it's a cult. And you show up there and after a
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  little while, you're like, wow, like this whole freaking deal is rigged against me. Like they're,
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  they're trying to like mess with me and like take over and, you know, steal my house. I don't
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  know what they're doing. But like my point is, is that, um, that's why the ability to withdraw
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  consent is so important for any reason at any time or for no reason at all, right? Like if you
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  just are like, I'm done here, like boom, you should be able to get out. Now the thing that's a little
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  unfortunate is that there are systems in blockchain and in the Bitcoin area where you can't leave.
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  Right? Like, like, for example, in some cases where there's like a scam, like you deposit a bunch
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  of money and then you go over to the withdrawal section. I'm like, okay, I'm ready to withdraw. I'm
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  kind of sick of this place. And you click withdraw. And then it just, there's some, oh, it's a,
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  it's a software bug. Like, you know, you can't get your things out ever, right? So like,
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  and how many times have you, you see that in the news every month, right? I think there was just one
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  in South Africa. It was like three billion to, uh, it was just just like last week, but it
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  happens all day. It's a, it's a little unclear. Uh, one of the really funny things about that is
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  there was reporting about it that had their website and a past version of their website,
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  fairly recent, actually, was bragging about how they have like a hundred million in assets.
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  Right? And so like, it's unclear that it says biggest 3.6 billion. That is definitely what was
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  reported. Uh, you know, if so, it's the largest, uh, so-called hack in Bitcoin history. But, you
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  know, I think that, um, but you're absolutely right. Like that, that's an example, right? That's
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  an example where it's like, oh, you can deposit, but you can't withdraw. Um, that's a problem,
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  right? Like, so, so, you know, and obviously that's, um, you know, that's the opposite of freedom,
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  right? Because you can't leave, right? You know, your assets can't leave, right? And so part,
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  and part of part of part, I love this, by the way, I actually love the philosophical,
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  the way that you, you first went into this, I appreciate that a lot because that really helps
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  frame it for somebody who is trying to understand the nuance of what Bitcoin, blockchain, crypto,
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  DeFi is. So, um, one, one thing that I would also point out is, and I just, I was watching one of your
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  pizzas you did like the surviving the Wild West of DeFi. And I think there's a lot of great lessons
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  in that for people that are seeing DeFi and trying to figure out what the hell it is and even people
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  that understood blockchain and Bitcoin before. And then what's DeFi? So, um, one thing that is
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  important, though, is sometimes it's not the system that's, like you said, it's not always
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  assisted. Of course, the system, if they scam you, they scam you and the system doesn't let you
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  leave. But also it's your own personality. It's your own, um, it's your own perhaps over indexing
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  on, on a system and over trusting on a system before you fully understand it, which has led to
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  issues. And you spoke about that a lot. That is absolutely core, right? Which is, I think to me,
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  people don't have a really good sense of like risk management, right? So, if you watch
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  professional asset managers like venture capital, right? One of the key principles is diversification,
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  right? Because, you know, the thing that's really important to ask yourself is like, do I know what
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  I'm doing, right? And the, by the way, the definition, so if you read the book zero to one by Peter
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  Thiel, right? He effectively defines an investor as someone who doesn't know what to do, right? And
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  the reason he defines it that way is, is an entrepreneur is someone who is basically, quote,
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  unquote, knows what to do because they're just doing the thing, right? They're, you know, so for
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  example, if you take, you know, his most famous investment Facebook, right? Like if you're Mark
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  Zuckerberg, you're not diversifying, you're just going to go 1000 million percent into Facebook,
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  because that's the thing, right? And so the thing that, so by investing, you're immediately
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  someone who doesn't know what to do, right? Because you're diversifying, you know, and so the
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  diversification is a very fundamental pattern of dealing with risk, right? So, so in a sense, like,
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  if you think about it, like, you know, one approach is play, right? So when I describe play,
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  right? The idea becomes that, you know, play has to be based on a loosable amount, right? So I kind
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  of call this like grand canyon money. Imagine you're at the lip of the grand canyon and you're
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  throwing an amount of money into the grand canyon, right? Like, so whatever that amount is for you,
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  like that's probably your first kind of Bitcoin purchase amount, you know? So if it's $5 or
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  if that's too much, maybe it's like a buck 50 or whatever you can imagine throwing into the grand
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  canyon, right? Because, you know, and obviously, like, you know, if you're picturing throwing your
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  life savings into the grand canyon, like, you know, like good luck. But, you know, I think broadly
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  speaking, like that's that's that's the first thing, right? Play. And then I think as you start to
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  kind of get your feet wet, then diversification, right? Where you basically take the number of
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  grand canyon units and you maybe multiply that by like three or four and then you try three or
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  four different things, you know? And each time you're kind of learning more and more about these
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  games, you know? And as you learn more, you have a better and better chance of like, deriving your
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  own opinion. Because that's the thing that I think is unfortunate is, you know, the existence of
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  influencers in crypto is like just human weakness. Like it, it's really, it's been, you know,
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  it's been a toxic effect because, you know, most of this so-called influencers are, you know,
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  their self-interested parties, right? They're they're basically predatory. So, you know, that's
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  so just just blindly following what other people tell you to buy on the internet is just
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  provably bad. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe
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  button so you never miss an episode. And if you want to dive deeper into this conversation,
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  check out the links in the description to watch the full episode. See you in the next one.